Universe simulations might naturally occur all over the place. By simulation I mean: when there is some physical process P in universe U with time evolution operator T and there is a map M from P to another universe u with time evolution operator t such that M P = u and M T P = t M P, ie M P' = u', then universe U is simulating universe u (tentative definition, but it seems to work) -- see the attached image

If time-evolution operator consistency like this is all that's necessary for a universe to be simulating another universe, then there might be arbitrarily complex universes embedded in some real-world physical processes. There could be entities living in things around us as encrypted information-containing processes

But, the maps between physical processes in our universe and these simulated universes might be incredibly complex and high-entropy (when taken together). The physical processes themselves might be incredibly complex and individually high-entropy, and they may be open systems (as long as there is time-operator consistency), so they might be spread through and around other processes

I think too there is maybe some more-abstract model here involving self-simulation and holographic self-encoding. The universe could be in essence simulating itself in some sense. If there are larger patterns of time-evolution operator consistencies in arbitrary maps between information-spaces in sections of the universe. In essence, the laws of physics themselves might be some image of a much more grand physics, and the universe we see is an image of a much more grand universe. This coming, of course, from me as I continue to look at quantum mechanics from an information-theoretical perspective, where this kind of stuff is natural because a classical universe a la MWI is one term in a decomposition of a universal superposition

Note: there may be other preferred operator consistency properties like energy conservation, momentum conservation, etc. But this general time-operator consistency puts no constraints on the physics of the simulated universe (other than that it changes in time)

Another note: ultimately whether a person thinks there is a simulated universe in their coffee mug or whatever implies that there is some closed cycle of maps which allows them to consistently extract coherent information from that universe, and if it quacks like a duck and so on it is a simulated universe